Published 4:00 am, Thursday, May 6, 1999

1999-05-06 04:00:00 PDT Washington -- Suspected Chinese nuclear spy Wen Ho Lee failed an FBI lie detector test in January 1984 that sought to determine whether he had had contact with foreign intelligence services or had inappropriately shared classified information, members of Congress were told yesterday.

Although the Los Alamos nuclear scientist subsequently passed a second FBI polygraph, the incident means Lee was investigated for possible espionage at least 12 years earlier than previous accounts have suggested -- and 15 years before he ultimately was fired for security violations.

Lee is now the only suspect in a dramatic FBI investigation, code- named Kindred Spirit and involving dozens of federal agents. The probe has confirmed Chinese espionage into U.S. nuclear warhead design secrets in the 1980s, and may involve the compromise of highly classified computer programs and data from hundreds of underground nuclear tests and simulations.

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-- Scientists at the government's weapons laboratories can still download nuclear secrets onto computer disks and walk out without being checked, officials at three nuclear labs told Congress. Floppy disk drives on computers on an unclassified computer network have been disabled or sealed in recent weeks, but not on the classified computers, officials said.

-- The FBI attempted to entice Lee into spying by using two Chinese American bureau agents. The so-called "false flag" operation involved the two agents contacting the Los Alamos physicist and saying they were looking for information to help their country. Lee listened, according to sources, and later turned them down.

-- Investigators did not examine Lee's office computer until nearly three years after he first became a suspect in the theft of nuclear secrets. Officials said Lee's computer was not examined earlier even though a 1995 policy statement by Los Alamos notified employees that the lab or federal government could audit or access office computers of any employee without notice.

But the FBI and the Justice Department decided that the policy statement would not enable them to use evidence from a computer search in court, Browne said, and they chose not to seek a search warrant that would have made the results of a search admissible in court. "An individual is suspected of being a spy with access to all of our warhead information . . . and we did not get into his computer. This is total incompetence," said Senator Don Nickles, R-Okla., at a hearing held by the Energy and Natural Resources Committee.

Domenici told the Committee that the FBI never informed Lee's supervisors at Los Alamos or the Energy Department, which runs the nation's nuclear weapons labs, that Lee had initially failed their polygraph test.

Lee gave deceptive answers to seven questions, Domenici said. The FBI gave Lee an opportunity to explain his answers and retake the test, and he passed the second polygraph. The FBI then determined that he had cleared the polygraph.

The Energy Department's regional office in Albuquerque, N.M., only learned of the FBI probe in 1989 during a standard five-year review of Lee's top-secret "Q" clearance. It then transferred Lee's personnel file to Energy Department headquarters in Washington.

"The file was lost within DOE headquarters," Domenici said. He added that the Albuquerque office ultimately hired an outside contractor in 1992 to reconstruct the lost Lee file. An Energy Department spokeswoman said she could not comment on the issue.

The FBI and Energy Department have said that Lee was identified in 1996 as the chief suspect in an investigation into whether Beijing had acquired top-secret details about the shape and design of America's most modern nuclear warhead.

But Lee's "Q" clearance at Los Alamos was not withdrawn until late last year. In another apparent mix- up, FBI Director Louis Freeh told Elizabeth Moler, then deputy secretary of energy, in July 1997 that the FBI investigation would not be jeopardized if Lee's security clearance were lifted or if he were transferred to a less sensitive job.

But that information was not passed to officials at Los Alamos, lab director John Browne testified yesterday.

Lee was fired two months ago after failing another FBI polygraph test that focused, in part, on whether he had passed classified data on nuclear warheads while attending scientific conferences in Beijing in 1986 and 1988.

Three weeks after he was fired, the FBI determined that Lee had used a large magnetic tape drive to improperly transfer nearly 2,000 classified computer files, containing computer programs and data derived from hundreds of underground nuclear-weapons tests and simulations, into an internal lab computer network that is considered vulnerable to outsiders.

Lee was not among those in the lab who was supposed to know how to transfer the files, officials said. He unsuccessfully tried to delete the files from his computer two days after he had failed the polygraph test, but before he was fired.

The transfers began in 1983 and ended in 1995, when new lab computer regulations prevented such file transfers.

Los Alamos director Browne said he could think of "no benign reason" for Lee, a senior computer scientist in the weapons division, to transfer the files.

Lee's lawyer, Mark Holscher, declined to discuss Lee's reasons for transferring the files. Lee has not been charged in the case.

The FBI first interviewed and polygraphed Lee in January 1984, as part of an investigation code-named Tiger Trap. In that case, Lee had telephoned a fellow Taiwanese- born scientist at the Livermore Livermore Laboratory in Alameda County, Calif., in late 1982 and was overheard on an FBI wiretap.

The Livermore scientist was under suspicion for passing classified data to China about America's neutron bomb. The scientist was never charged or publicly identified. A U.S. intelligence official who has heard the wiretap said Lee's comments were "suspicious" but not conclusive.

In the FBI polygraph, however, Lee showed deception on seven questions dealing with his contact with foreign intelligence services and whether he had inappropriately shared classified information.

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